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Will  outsourcing harm India and also the USA?

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In the current US presidential debates, one of the agenda items is to stop outsourcing and how outsourcing is harming the US workers. I wonder if any of us have some answers. Of course, much has been written about how it would help the global corporations and also make the US competitive while helping developing countries’ workers earn a decent salary (though about one-tenth [or maybe more] of the corresponding US worker.)

A US teacher gets about $20,000-$30,000 annual starting pay (even in the remotest regions- actually Alaska teachers get paid a much higher rate) , while Parijat Academy and many other educational organizations in India cannot afford to pay more than $500 (Five Hundred only) or Rs 24,000 per year to their teachers. I was recently offered a salary of Rs.24,000 ($500) per year (Rs 2,000 per month) for Parijat Academy teachers- the senior ones – from Asha for Education, Washington DC chapter. It would cost $5,000 per year to educate 400 school children for free in tribal Assam – 30 miles from state capital Guwahati. In the US it costs at least $5,000 per year to educate ONE child.


My new roommate , a graduate of BITS Pilani (a veteran of IBM and Microsoft in the US) , stressed that not only the US but even India is losing due to outsourcing. He argued that the poor are feeling left out and taking up arms against the new rich. Now taking up the case about the outsourcing’s effect in India teachers – for one thing – as Asha for Education’s project coordinator for Washington DC – I have witnessed that a large number of IT and other highly skilled professionals in India and the US etc., have great interest in promoting education among the underprivileged in India.

This is in contrast to those who never had an opportunity to experience the benefit of education in economic development (as in the US ) and are content with status quo in rural areas in India (and even in government schools in city-based/urban India ). When for thousands of years India did not change much for the worse in spite of the landed aristocracy in rural India, one should not expect any worse even if education level and education system remained the same – one village teacher teaching 250 kids (it is still a reality in many projects we support with Asha for Education as we were discussing in the last meeting).

Being part of a global economy has widened the horizons of the techies involved with outsourcing etc., – thus they are more concerned with the education system or lack thereof. It can be argued (by likes of Nobel Laureate Amartya Sen) that better education will lead to economic and social betterment/freedom of the poor.

Any comments?

Umesh Sharma



You have very rightly said that India is losing due to outsourcing. This is
very much because US serves as a very big market for the I.T. services too
apart from the educational services.

As far as US is concerned, a stop over the outsourcing will certainly help
the US itself. It enables more jobs in the country, higher degree of
specialization, etc. Infact in my view, outsourcing might be economically
viable for any country but not from a social perspective. So it is good for
the country if they try reducing outsourcing as said by leaders like Obama
and McGain.

If we look upon all the other areas including education as a whole, i dont
think that the current financial turmoil may harm India. We have new
markets opening up in the European & Russian countries as well that are
yet to be exploited. They serve a big opportunity for us. Although the
current crisis might have some temporary impact it is harmless in the long
run. Also, India's strong educational system provides a prolonged support
in the international arena.

Prashant Gupta